The following correction was printed in the Guardian's Corrections and clarifications column, Friday 16 July 2010

The Swiss justice minister, Eveline Widmer-Schlumpf, was inadvertently downgraded in status when we referred to her in the report below as a mere "justice ministry official in Bern"

Roman Polanski was able to step beyond the confines of his garden for the first time in 10 months yesterday, after Swiss authorities decided not to extradite him to the US for sentencing on sex charges, seemingly ending a 33-year judicial odyssey.

The 76-year-old film director was believed to be on his way to France last night, after he was released from house arrest at the mountain chalet where he has been staying since December 2009 and his electronic tag was removed.

"The Franco-Polish film maker is now a free man. The restrictions on his liberty have been lifted," said Eveline Widmer-Schlumpf, a justice ministry official in Bern.

The decision came as a jolt, as it had been widely predicted that Polanski would be extradited to the US, where he is wanted for sentencing for having sex with a 13-year-old girl in 1977 in Los Angeles. The move elicited a furious response from legal authorities in LA and Washington.

Steve Cooley, the LA prosecutor at the forefront of the extradition drive told the LA Times that he was "genuinely surprised and disappointed", adding that "Mr Polanski is still convicted of serious child sex charges".

In Washington, the federal Justice Department said the decision was "regrettable". A spokesman said: "The girl was 13, there was an adult, there was a rape or unlawful sex, whatever you want to call it. We think that's a crime, and that is why we have been pursuing this case over many, many years."

Despite expressions of disapproval, it is not clear what actions if any remain for US authorities to bring Polanski to book.

The director was unexpectedly arrested on an American warrant last September while in Zurich to collect a lifetime achievement award for his film work.

The Swiss justice ministry's announcement was made two and a half hours after Polanski had been freed, allowing him time to escape media attention. Only a few people knew at what time he left his mountain retreat, known as Milky Way.

There was no comment by Polanski and no reaction from his family. His lawyer, Hervé Termime, said: "It's an enormous satisfaction and a great relief after the pain suffered by Roman Polanski and his family."

Polanski was born in Paris to Polish parents and has won Oscars for his films such as Rosemary's Baby, Chinatown and The Pianist. He was accused of drugging, plying with alcohol, and raping a 13-year-old girl during a modelling shoot in 1977 when the director was aged 44.

Originally charged with six crimes, including sodomy, child molestation and rape by use of drugs, he pleaded guilty to just one charged of unlawful sexual intercourse.

Widmer-Schlumpf said the Swiss decision not to extradite him did not mean that the authorities were making a judgment on the crime. She stressed it was "not about deciding whether he is guilty or not guilty".

The decision had been based on several factors, not least that for years prior to the event Polanski had been repeatedly allowed to enter and leave Switzerland as he pleased, and had entered the country in good faith to collect his award last year.If he were turned over now to the US, she argued, it would be in breach of the Swiss ideals of "truth and credibility". She also said that US authorities had refused to provide certain documents pertaining to the original case, which had made it impossible for the Swiss justice ministry to decide otherwise than as it did.

There is a longstanding dispute in the US over what happened in the case after Polanski pleaded guilty to unlawful sexual intercourse. The defence says that the judge at the time, Laurence Rittenband, now dead, had agreed in meetings with Polanski's lawyers to simply sentence him to a 90-day diagnostic study.

But Rittenband apparently later changed his mind and summoned Polanski for more severe sentencing, by which time the director had fled to France.

Asked if she now expected repercussions from the US, Widmer-Schlumpf said she was "unconcerned", as she had discussed the case at length in "intensive discussions" with the US ambassador to Switzerland. They had reached an understanding, she said, adding that there were many examples of the US refusing to carry out Swiss extradition requests.

She was not expecting a compensation claim from Polanski, who will receive back the SFr4.5m (£2.82m) he put up as bail money he paid at the time of his arrest.

Since then numerous cultural and political figureheads have campaigned for his release, including the film-makers Woody Allen, Pedro Almodóvar, Martin Scorsese and Costa-Gavras as well as the French president, Nicolas Sarkozy.

Polanski's release and the end of his enforced and lengthy isolation brings a denouement to months of cat-and-mouse games between the director and the media.

His chalet, 3,400ft up in the Alps of the Berner Oberland in Gstaad, where neighbours include the actors Sir Roger Moore, Sir Sean Connery and the model Elle Macpherson, was bombarded by paparazzi, who sneaked into the garden to get shots of the director picnicking with his children Morgane and Elvis, playing with the dog, or talking to the police.

He fought for, but was refused, permission to leave the chalet to attend the premiere of his Iraq war thriller, The Ghost, at the Berlin film festival in February.

He is now in theory free to travel to any country where there is no warrant for his arrest. However, he will have to avoid the US and Britain, where the legal system could ensnare him again.